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Tuesday, March 11, 2003

South by Southwest 2003 XVIII

Richard Florida: The Rise of the Creative Class

Florida is a professor of economic development at Carnegie-Mellon Universiy and author of The Rise of the Creative Class. Here is a rough transcript of his remarks:

Kirk Watson: Welcome, everyone. I'm pleased to see such a crowd. As the former mayor of Austin and someone who tried to pay attention to why regions flourish, I have been enamored with Dr. Florida's work for some time. It is difficult to be a rock star when you talk about economic development and regionalism. Richard Florida is a rock star. Many of you already know that he's the author of The Rise of the Creative Class. If you have not picked up that book, you should do so. In Austin, Texas, we debate creativity all the time. It's stirring debate all around the country.

Richard Florida: When you callled me up, it was a long time ago. When you said, "Will you do South by Southwest?", I jumped out of my chair. I said, "Sure, I'll do South by Southwest!" It's great to be here.

After writing this book I've gotten to be interviewed by lots of journalists. The book couldn’t have been written without two places, Newark, New Jersey, and Pittsburgh, Pennsylvania. I teach at a place called Carnegie-Mellon. If you know anything about Carnegie-Mellon you know it’s a pretty technologically oriented place.

When I was recruited there in 1987, Pittsburgh was going through a bit of a transformation. They recruited me and the whole idea was to turn Pittsburgh into a high-tech place. The steel mills were closing. We would develop small business incubators, high-tech councils, and spur economic development. I used to come to Austin and talk to people in entrepreneurship. The idea was that we could do some of that in Pittsburgh.

You might not be aware that one of the Carnegie-Mellon spin-offs is Sun Microsystems. Carnegie-Mellon was spinning off companies, but for some reason they weren't rooting in Pittsburgh. In 1991 and 1992 we thought we'd hit a major home run. We'd landed a big Internet search company, Lycos. Everyone thought that that was the company that would change Pittsburgh. 1994 came along. It was my seventh year, so I got to go on sabbatical. I went to teach at Harvard.

I opened up the paper one morning, and it said Lycos to move to Boston. That was a surprise. This was the company that was supposed to transform Pittsburgh. And it was moving to Boston.

People move to the place that has the best jobs. You will do anything in your community regardless of what it takes to lure those jobs. Here was the bizarre thing. The people weren't moving to the jobs. Jobs were moving to the people. When I called the people at Carnegie-Mellon to see why Lycos was moving to Boston, it wasn't that Boston was offering economically incentives. Lycos was moving because it wanted to be closer to the people that were in Boston.

That's when the lightbulb turned on in my head. Companies don't lead economic growth, people do. People move inexorably to the highest paying jobs. Maybe, just maybe, the biggest driver to economic growth was where people choose to go. When I looked back over the entire field I found not one paper about this question. No one had even bothered too ask.

We did all sorts of research. We talked to waiters and waitresses. We talked to people in bars. We talked to students. Students are interesting because they're making location decisions. And we did some statistical research.

The first thing we figured out was that most people have belief that what generates economic growth and wealth is technological progress. Some people criticize my notion off the creative class as elitist. Generally speaking, the field of economics says if you want to grow your field you need to invest in technology. My simple-minded notion was that that was far too narrow of a conceptualization. Technology is a very narrow sliver of something called human creativity.

Where you get real cycles of economic growth is where the different kinds of creativity come together. When hippie culture and universities come together, centers of economic growth have always been centers of creativity. Where in the hell is Silicon Valley? It may be nerdy, but it's equidistant between the Haight-Ashbury and the Monterey peninsula. Before the Grateful Dead, there was John Steinbeck. It has always been a place of creativity.

In the Bay Area, when Apple when to Valentine to ask for money, he didn't care what they looked like. Creativity is the source of innovation, not technology. The argument in the book is that creativity is involved in and integral to everything we do, every good we make, and every service we provide. I learned that from my father.

My dad's glasses cost $8 or $9. I'm not going to tell you how much these bad boys cost, but they cost a lot more than that, and I got them for 50% off. I didn't just buy the glasses, I bought the creative content. Whether its eyeglasses or textiles or CD's or music or architecture, everything is valued increasingly it’s the creative content of goods rather than the physical content.

Creativity is the economic force. Where does creativity come from? This is the point that many of the critics of the book criticize. Isn't the idea of the creative class elitist? Every single human being is creative. That's what the book says. Creativity is the great leveler. It defies race, gender, ethnicity, appearance, and sexual orientation. You can't hand creativity down to your children no matter how rich you are. If you suck at playing guitar, you suck. It comes from real live people who defy type.

People are the critical economic resource, not the raw materials, gold, or oil. Those places that can attract creative people because they provide the environment, they're going to be the economic winners. Because people are fickle. What do people want? People want to be themselves. All the other stuff give signals that a place will let people be themselves.

If creativity is the economic force and creativity comes from people and people are the real thing that matters, we come to the third thin. That's the role of place, of community, or region. Geographic place and community have become the essential organizing building block. Geographic place and community have supplanted the corporation. That makes our job a heck of a lot harder. We, all of us, have become stewards of the essential economic building block of the creativity age.

It's not just the Internet. This has been going on for 100 years. The great story of the 20th century was that the Internet was going to make place irrelevant. What is a corporation? What is a company? Well, the company pays dividends, salaries, and wages. It provides a base of people to participate in the company. How does a company do that? The company takes a person, a human being, and matches them up with a task. In the age of the Company Man, companies matched lots of people to lots of jobs, and it worked relatively well. Anyone remember what IBM used to stand for? I've been moved. Your company was your life.

What's the average length of a job today? Three years. What is the mechanism of matching people to work? The geographic place. For a company, the geographic place provides a thick pool of potential people who can come to work or leave work to do more interesting things. People told us we won't move to a place for a job. We want to move to places with lots of jobs. We want to move to a place where there's a vibrant labor market. Place provides this critical economic organizing function.

We began to ask people why do you move. Jobs weren't high on the list. Economists believe that people move according to economic incentives. If you're a 22 year old and you're graduating from college, and there's a great job there but no boys or girls, where are you going to go? People go to other people. Creativity people have always wanted to live in creative environments. There weren't a lot of people who are paid to be creative, so you had these little pockets of people. According to our research, there are 38 million people paid to be creative as part of their job. That's a third of the workforce.

People wanted to be in exciting places with lots of stimli. They wanted outdoors stuff. They wanted to be able to do what they wanted to do. It's not just about the high arts. The things that came through was what we call the informal arts, the independent arts, or street-level culture. Artistic and cultural and music scenes. We associate a place with its audio identity. We had do develop an indicator, right? Can we make up a bohemian index? We counted the people who were paid to be bohemian. It's an admittedly crude, flawed measure. But when you test across 300 metro cities, places that score high on this bohemian measure have high rates of innovation and economic growth.

Places also need to be open, accepting, inclusive, and tolerant. Places that are exlusionary and segregationist, creative people move away. Then other people move away. What would be an indicator that a place is open? We build a measure of foreign-born people and called it the Melting Pot Index. Canada's gone one better. They call it a mosaic. We accept people to melt and become assimilated. The Canadians say it's a mosaic. Come, whoever you are, bring your cultural heritage, and you can be a Canadian.

It's bogus bullshit that creativity is American. 30% of the companies in Silicon Valley were founded by a non-American. The places that are open are the economic winners. Then I met Gary Gates. I was studying the high-tech stuff, and Gary was studying gay people. We met, and we put our lists together, and the high-tech cities were also the gayest cities. I named my five favorite cities, and they were the top five gay cities.

Places that are open to diversity, places where anyone can come and plug in, those are the places that are going to get economic advantage. It wasn't so much that gays or the bohemians drove or attracted economic growth, but that the place attracted people and creativity bubbled up from the people who were there.

Lastly, what people gravitate to in a world with high levels of transience is history and authenticity. Pittsburgh might have a lot more history and authenticity than Austin, but we want to eradicate it. We knock down the Homestead Works and put up a mall because we were afraid o our past. Austin has leveraged its history.

I grew up in a Leave it to Beaver family. My dad went to work, my mom stayed at home, and there were two boys. You know how many Americans live in a family like that today? 7%. Between 93% and 75% live in some other kind of different setup. It's not one or the other. It's not about recruiting families, gays, or singles. It's about having cities that have something for everyone.